On the evening of September 2nd, Baic Bluepark New Energy Technology announced that, in order to meet the needs of its subsidiary's business development and optimize its capital structure, the wholly-owned subsidiary Beijing New Energy plans to increase its capital and shares by publicly listing the introduction of strategic investors, with the capital increase price not lower than the filed evaluation result and the capital increase amount not exceeding 10 billion yuan.

In addition, Baic Bluepark announced on the same evening that its shareholder, Baic Motor Co., Ltd., plans to increase the capital of its subsidiary, Baic New Energy, by 2 billion yuan. This means that if both plans are successfully implemented, Baic New Energy will receive a total investment of 12 billion yuan.

The Star Market Daily noted that from 2021 to 2023, Baic New Energy has been experiencing consecutive losses. In terms of developing independent new energy vehicles, Baic New Energy has fallen behind its peers.

An industry insider told the Star Market Daily that the introduction of strategic investors by Baic New Energy this time may be to optimize and adjust resources, improve the company's cash flow, and enable the company to achieve better development.

Both the parent and subsidiary companies have been experiencing consecutive losses for several years.

Public information shows that Baic Bluepark, formerly known as Beijing Qianfeng Electronics Co., Ltd., was established in 1992 as a member of Baic Motor Corporation, and completed a private placement in 2023.

The announcement shows that in terms of equity, Baic Bluepark directly holds 99.99% of Baic New Energy's shares, and through Beijing Bluepark Ji Hu Auto Technology Co., Ltd., holds 0.01% of Baic New Energy's shares, holding a total of 100% of Baic New Energy's shares.

BAIC New Energy's main business includes the research and development, production, and sales service of pure electric passenger vehicles. It is currently fully developing the Jihu, Beijing Automotive, and Huazhang Automotive three major brands. The main new energy vehicle models currently on sale include Alpha T5, Alpha T, Alpha S, Alpha S5, Jihu Koala, and Enjoy S9.

The announcement shows that BAIC New Energy has sustained losses in net income from 2021 to 2023, with losses of 3.74 billion yuan, 2.54 billion yuan, and 2.18 billion yuan respectively.

In addition, according to the audit report of BAIC New Energy for the year 2023 and the first half of 2024, the net loss from January to June 2024 was 1.124 billion yuan.

It is worth mentioning that BAIC's parent company, BAIC Bluepark, has also sustained losses for four consecutive years. From 2020 to 2023, BAIC Bluepark reported losses of 6.482 billion yuan, 5.244 billion yuan, 5.465 billion yuan, and 5.4 billion yuan respectively, with a total accumulated loss of over 22.3 billion yuan in the past four years.

In the first half of 2024, BAIC Bluepark achieved operating income of 3.741 billion yuan, and the net profit attributable to shareholders of the listed company was -2.571 billion yuan.

Regarding the performance losses, BAIC Bluepark stated that on the one hand, the increasingly intense competition in the new energy vehicle market and the escalating price war have squeezed profit margins. On the other hand, the company continues to invest in the continuous advancement of product development towards high-end, in technology research and development, brand channel construction, brand image sharpening, and operational efficiency improvement, thus exerting a certain impact on the company's short-term performance.

Can the bet on the Enjoy S9 turn the loss into profit?

The BAIC New Energy official website shows that starting from 2020, BAIC New Energy has entered a period of adjustment and transformation, preparing for a new departure in the pursuit of high-quality development.

To reverse the situation, this year, BAIC New Energy has deepened its cooperation with Huawei and jointly launched the Enjoy S9. Zhang Jianyong, Secretary of the Party Committee and Chairman of BAIC Group, said at the 'HarmonyOS Smart Enjoy S9 and Huawei Full-scenario New Product Launch Event' that, 'This collaboration with Huawei represents a high-level integration of BAIC's entire vehicle R&D, production, parts, and service trade advantages, ALL IN Enjoy S9, with core global strategy and top priority strategy.'

Zhao Ji, the Secretary of the Board of Directors of BAIC Bluepark, previously stated that marching forward with Huawei will accelerate the digital transformation of BAIC New Energy's intelligence and enterprise operation, and Huawei's channel empowerment will inject strong impetus into BAIC New Energy, benefiting the sales of its Jihu and Enjoy vehicles, and helping to quickly achieve its sales targets.

In July of this year, BAIC New Energy's Jihu brand sales soared to 8017 vehicles, a year-on-year increase of 329%, breaking through the eight thousand vehicle mark for two consecutive months. In the first 7 months of this year, BAIC New Energy's cumulative sales reached 38,992 vehicles.

It is reported that BAIC Group invested 1.6 billion yuan to build the Enjoy Super Factory in Miyun District, Beijing, with a current production capacity of 1.2 million vehicles and a future reserved capacity of 3 million vehicles.

Industry insiders believe that BAIC New Energy's collaboration with Huawei is fundamentally about building and deepening strategic relationships with partners, creating a collaborative network and ecosystem for integrated industry chain, intelligent electric vehicles, and automotive aftermarket. Whether it can turn losses into profits in this collaboration remains to be seen.